Optimistic about Renewable Energy

Posted on Posted in Blog, Renewables

windI was interested to learn of Stanford professor Mark Jacobson and his work creating realistic plans for powering the United States on 100% renewable energy. His detailed models show how renewables can be scaled up to work for various regions around the country, with specific proposals to get California, Washington and New York states there by 2050. User friendly, interactive maps that show the basic structures for each state can be found here.

Jacobson is a leading climate scientist and is known for his rather optimistic outlook, which I personally find refreshing. And so I was motivated to take a look at the current transition towards a greener energy supply, and to highlight some reasons to be encouraged by the direction that things seem to be going. I don’t want to sound naïve and simply ignore the immense challenges in achieving the visions such as Jacobson’s, but rather to take a moment to recognise that those visions may actually be within reach, and perhaps consider those challenges more as opportunities.

Strong political rhetoric

The market alone is not going to drive the uptake of renewables, at least not as rapidly as necessary to effectively counter the current climate trajectory we are on. Therefore, strong government initiatives are required to promote the technological development and diffusion of renewables, and to also accurately price carbon and assign the appropriate costs associated with fossil fuel resource extraction, processing and use. Politics are at the heart of governmental action, and climate change is on the top of mind as leaders will be meeting soon in Paris for the UN Climate Change Conference.  The objectives are definitely ambitious:  to achieve a legally binding and universal agreement on climate, from all the nations of the world. Can they do it?

In the backdrop of an American campaign cycle, the rhetoric is indeed strong, and recently there has been some particularly powerful language coming from the Democratic side: Hillary Clinton made the call to achieve a 100% clean energy goal; Bernie Sanders, in the wake of the Paris attacks, remarked that climate change remains “the biggest national security threat facing the United States;” and Secretary of State John Kerry related climate change effects to wider global security issues such as the unrest in Syria and the European refugee crisis.

Of course politician’s words are far from reliable, but framing the issues in terms of national security and making the connection to wider conflicts and crises can have the effect of depoliticizing the issue and making it less about “green” and more about security and stability – something more likely to attract bipartisan support.

Support among the public seems to be building as well. Ahead of the upcoming Paris conference, 72% of US voters polled said they would support the President signing an international agreement committing to carbon reduction. Interestingly, even 52% of Republican voters expressed their support, as compared to 88% of Democrats and 73% of independents. Among younger voters 18 to 34, 86% would endorse an agreement, indicating a dramatic potential shift in sentiment as the electorate ages.

It is troubling that the Republican Party has had so much influence in the global push to transition away from fossil fuel. The influence of the Party (and the influence of the oil lobby) has thwarted successful outcomes from UN talks in the past. In 2010 the derailment of Obama’s cap and trade bill seemed to be the harbinger of doom for climate action.  However, despite Republican Party leadership stances, polls suggest Republican voters are inclined to support candidates who would back some form of climate action. This time around in Paris feels like there is more chance for meaningful outcomes, as Obama appears determined to represent the US in favour of enacting change.

Fossil fuel industry in decline

If we haven’t already hit Peak Oil, the recent about face by Royal Dutch Shell, when it turned its back on the Arctic drilling campaign, could be an acute indicator of difficult times ahead for an industry that is finding it harder and harder to tap into lucrative reserves. While Shell’s decision to abandon exploration activities in Arctic was largely driven by lower global oil prices, it nevertheless highlights challenges faced by the industry. It is getting more and more costly, complicated and dangerous to extract oil, and increasingly its subsidies, practices and reputations are coming under mounting scrutiny. Investors are starting to shift money into assets with rapid growth, wide benefit, solid public acceptance – energy efficiency and investment in renewables lead the pack.

Even more troubled is the coal industry. In the US, the four largest coal companies were worth a combined $21.7 billion dollars in June 2010. Now they’re worth $1.2 billion. Two other large coal concerns, Patriot and James River, have both filed for bankruptcy in recent years. Part of this decline can be attributed to lower oil and natural gas costs, but another factor is increased regulation on coal companies and power generation plants to clean up their acts. This has shifted “true cost” burdens of pollution and negative health effects back onto the coal industry, with the net result of reducing overall market share. Additionally, as China shifts its dependence away from coal, global demand for the commodity appears to be slowing fast.

The Australia Coal industry seems to have its head in the sand as it plans to triple its production levels by 2030. But the writing is on the wall as a number of the relevant projects have become financially unviable in recent years such as the Wiggins Island, Balaclava Island and Dudgeon Point coal terminals and the Wandoan coal mine in Queensland, and energy industry analysts warn of further stranded assets and capex losses.

China has joined the party

As the Chinese powerhouse grows into a developed nation it needs all the energy it can get. Powered predominantly by coal, China is the largest producer and user of coal, but the effect of feeding its insatiable growth with dirty energy has created pollution problems that are horrendous. (For a beautifully presented and incredibly heartfelt review of the smog and pollution problems in China watch Chai Jing’s ‘Under the Dome.’)

Environmental aspects aside, their plans for growth cannot be achieved on a fossil fuel trajectory alone without engaging in the familiar behaviour of war and instability. China has turned to renewables to manufacture energy domestically in order to reduce their reliance on foreign imports. China’s heavy investments in wind and solar has positioned them as leaders of renewable energy production as well as far and away the leaders of equipment manufacture. Simultaneously, their use of coal has plateaued since 2010, and actually declined in 2014. It shows no sign of slowing this trend as it has plans to increase solar capacity to 100GW by 2020.

The massive Chinese investment in renewable has only been good for the global industry, as R&D funding and competition have driven the costs way down, faster than anticipated, making solar and wind technology more available for rapid uptake.

The Energy Revolution is well underway

Returning to Steve Jacobson, we are starting to see real and actionable plans to take us from the vision to reality, with frameworks and guidelines to follow that show us valid solutions within reasonable time frames. By balancing different renewable methods of power generation, the problems of “intermittent resource” can be overcome to satisfy overall demand 24 hours a day. His plans are tailored for different regions across the US to maximally capitalise on the respective energy sources for each area. Jacobson argues that if we start now, we can achieve 100% conversion to renewables by 2050.  Jacobson is definitely optimistic, but his enthusiasm is inspiring and his drive to push the limits is essential.

Wind and solar power are finally becoming cost competitive with fossil fuel. While in most instances direct comparisons show solar PV to be more expensive still, when taking into account “true costs” of carbon based energy’s effects on human health and climate, renewables may be even better than grid parity. In several models, wind energy is already at parity.

European countries are demonstrating their commitment to the cause as they are “well on their way” to achieving their targets of shifting 20% of their energy supply to renewables by 2020. Germany’s Energiewende is a model of commitment by both the German government and the people. With estimated costs above a trillion Euro, Germany is massively expanding their share of renewables as they aim to reduce greenhouse gas emission by 80% and be powered by 60% renewables in 2050. Although not without its criticisms, the Energiewende should be a model for other developed nations to be proactive in growing their own respective industries.

There are many, many more things to be excited about, and hopefully some optimism will energise anyone who might be finding themselves stuck in the tar pits.

 Ian Waight IW

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